ANTONIO CASTILLO & ALBERT TRAN DIE SOZIALE
MARKTWIRTSCHAFT
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WHAT IS THIS? Soziale Marktwirtschaft, or Social Market
Economy, is a German form of market capitalism that rejects both
laissez-faire economics and socialism. Instead, the Social Market
Economy is a third way between Democratic Socialism and Classical
Economics. It is also known as the Rhine Model or Social
Capitalism
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ORIGINS: OTTO VON BISMARCK Otto von Bismarck was a German
chancellor from 1871 to 1890 Considered by many the father of
modern Germany, his policies had a huge impact on German history
and economics
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BISMARCKS REFORMS Rapid industrialization, coincided with the
establishment of free trade and the liberalization of the German
market. The establishment of the first Welfare State, with
healthcare insurance and a pension fund for German workers.
Suppression of subversive movements, like Socialism and Political
Catholicism.
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FAST FORWARD TO 1945 Germany suffered a humiliating defeat
after World War 2; millions of its people were dead and its cities
lay in ruins. The powerful Nazi institutions that laid its
framework were now abolished and one- third of the country was now
communist.
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CHRISTIAN DEMOCRATIC UNION The CDU is a centre- right,
Christian Democratic party that assumed the Soziale Marktwirtschaft
as its economic platform. Konrad Adenauer was the shrewd leader of
the CDU and chancellor during their time in government.
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THE MASTERMIND Ludwig Erhard was the Minister for Economics
from 1949 to 1963; he later served as Chancellor from 1963 to 1966.
He was the brains behind the Social Market Economy
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TWO PRONGED Soziale A driving force behind the adoption of
these policies in Germany was maintaining social stability.
Marktwirtschaft Dedication to the free market, with pragmatic
regulation. Providing enough for each German.
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UNDERLYING IDEOLOGY: CHRISTIAN ETHICS Defines concepts of right
(virtuous ) and wrong (sinful) behavior. More specifically, the
Social Market was influenced by Catholic Social Teachings.
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WIRTSCHAFTSWUNDER During the 1950s, Germany was one of the
fastest growing economy in the World. Unemployment: 1950 11% 1960
3%
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CONTINUED SUCCESS AND INFLUENCE Germany has the best economy in
Europe. The Lisbon Treaty cites the Soziale Marktwirtschaft as a
model for all of Europe.